Soaring U.S. Wind Power Sector Growing Nervous Over Tax Incentives

The US wind power sector is soaring thanks in large part to a tax policy that makes it attractive to investors, but the uncertainty surrounding those very incentives is casting a cloud over the future, according to the American Wind Energy Association (AWEA).

In the quarter to the end of September, a total of 1,204MW of wind capacity was installed across the US, taking new capacity installations for the year to date to 3,360MW – up 74% percent year on year – and the industry total to 43,461 MW, representing some 20% percent of global capacity, AWEA said Tuesday presenting its latest data.

With the fourth quarter set to be even bigger than normal, AWEA said total new installations for the year could be between 6,500MW and 7,500MW with developers rushing to get projects under construction as the deadline nears under the crucial Production Tax Credit (PTC) programme.

This compares with a total of 5,217MW last year, which was bolstered by a fourth quarter that accounted for 3,296MW of projects.

“We are hearing very strongly from our members that we need to keep the tax credit going,” said a spokesman for the association.

“The PTC is our top priority. We have always had bipartisan support for that policy. It was started by Republicans in Congress, some of whom are still there and pushing for it ... The challenge of course right now in Washington ... is to get any action or vehicles to move,” he told a phone-in web presentation, adding that he was optimistic there would eventually be some movement on the issue.

Statistics issued by AWEA show that the third quarter of the year was the busiest three months since 2008 and the third most active quarter on record.

Overall, there are 90 projects under construction in 29 states, totalling 8,400MW of capacity and ranging from single turbine installations to those with several hundred.

AWEA said that, because of the number of projects in the pipeline – in part in response to the looming demise of the PTC, which is currently due to expire at the end of 2012 – it expected next year to also be active.

But the picture for 2013 was shrouded in uncertainty, AWEA said.

“We understand that many developers are not necessarily scheduling projects for the year, waiting to see if there is a Production Tax Credit in place for the year 2013,” an AWEA spokeswoman added.